NCLAT Upholds NCLT Decision on Sapphire Media's Bid for Reliance Broadcast Network

The National Company Law Appellate Tribunal (NCLAT) dismissed appeals against the approval of Sapphire Media's bid for Reliance Broadcast Network Ltd. The Mumbai Bench of the National Company Law Tribunal (NCLT) had approved this resolution plan on May 6, 2024. Sapphire Media operates the FM radio business under the Big 92.7 FM brand.

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Abhijit Realtors & Infraventure and Creative Channel Advertising & Marketing, unsuccessful bidders, challenged the NCLT's decision. They filed five appeals with NCLAT, alleging irregularities in the resolution process conducted by Reliance Broadcast Network Ltd's resolution professional. However, these claims were rejected by the appellate tribunal.

Resolution Process and Bidding Details

The Corporate Insolvency Resolution Process (CIRP) for Reliance Broadcast Network began on February 24, 2023, following an application by IDBI Trusteeship Services, a financial creditor. Six resolution plans were submitted. Abhijit Realtors & Infraventure offered Rs 80.20 crore, Creative Channel Advertising & Marketing Rs 100 crore, Entertainment Network India Rs 37.17 crore, and Sapphire Media Rs 104.28 crore.

The Committee of Creditors (CoC) initiated a challenge process with a base price of Rs 240 crore as per the Request-For-Resolution-Plan (RFRP). The highest bid at each round became the Threshold Bid Amount for the next round. Bidders had to match or exceed this amount to continue participating.

Sapphire Media's Winning Bid

During the third round, Sapphire Media submitted a bid of Rs 251 crore, which was the highest at that stage. Subsequently, further negotiations were held with all resolution applicants as per RFRP guidelines to submit their best offers and revised financial proposals.

On November 4, 2023, revised bids were received: Rs 248 crore from a consortium of Abhijit Realtors & Infraventure and ENIL, Rs 240 crore from Creative Channel Advertising & Marketing, and Rs 261 crore from Sapphire Media. The CoC approved Sapphire Media's bid with an 88.97% vote share and forwarded it to NCLT for final approval.

NCLAT's Decision

The petitioners argued that Sapphire Media was ineligible to submit its resolution plan and questioned the challenge process before NCLAT. However, NCLAT found no irregularities in the process or in Sapphire Media's eligibility evaluation by the resolution professional.

NCLAT stated, "We have already found that the challenge mechanism as well as negotiation conducted by the resolution professional is in accordance with the CIRP Regulations and Process Note." The tribunal concluded that there was no basis to interfere with the May 6 order approving Sapphire Media's plan.

Ultimately, NCLAT upheld the NCLT's decision and dismissed all appeals against it. This outcome reinforces the legitimacy of Sapphire Media's acquisition of Reliance Broadcast Network Ltd under the approved resolution plan.